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| Eurozone crisis live: Spain's borrowing costs soar | Eurozone crisis live: Spain's borrowing costs soar |
| (40 minutes later) | |
| 1.46pm: The Swiss central bank has accepted that the Swiss franc could break through the 1.20 mark against the euro again, as it did last week. | |
| Interim president Thomas Jordan said further breaches of the Swiss National Bank's cap on the value of the franc "cannot be excluded". "We cannot control the franc market completely," he said. | |
| Dow Jones FX Trader has the full story here. | |
| 1.17pm: Reuters has taken a closer look at comments from Spain's chief central banker that Spanish banks may need more capital. You can read the full story here. He told a conference in Madrid: | 1.17pm: Reuters has taken a closer look at comments from Spain's chief central banker that Spanish banks may need more capital. You can read the full story here. He told a conference in Madrid: |
| If the Spanish economy finally recovers, what has been done will be enough, but if the economy worsens more than expected, it will be necessary to continue increasing and improving capital as necessary in order to have solid entities. | If the Spanish economy finally recovers, what has been done will be enough, but if the economy worsens more than expected, it will be necessary to continue increasing and improving capital as necessary in order to have solid entities. |
| The economy is forecast to shrink by 1.7% this year. Ordonez said it was unlikely the country would experience a strong recovery in the short-term and called for better competitiveness to generate budget surpluses. | The economy is forecast to shrink by 1.7% this year. Ordonez said it was unlikely the country would experience a strong recovery in the short-term and called for better competitiveness to generate budget surpluses. |
| 1.12pm: Sticking with the debt markets, Greece sold €1.3bn of 6-month treasury bills this morning. Greece paid a yield of 4.55%, down from 4.8% in the previous auction in March. | 1.12pm: Sticking with the debt markets, Greece sold €1.3bn of 6-month treasury bills this morning. Greece paid a yield of 4.55%, down from 4.8% in the previous auction in March. |
| 12.45pm: It's not only Spain being battered today. The Italian share index the FTSE MIB dropped 2.85% to 14787. | 12.45pm: It's not only Spain being battered today. The Italian share index the FTSE MIB dropped 2.85% to 14787. |
| Italy's borrowing costs are also rising, with the yield on the 10-year bond at 5.6%. Italy is due to sell €5bn of government bonds on Thursday. One trader said: | Italy's borrowing costs are also rising, with the yield on the 10-year bond at 5.6%. Italy is due to sell €5bn of government bonds on Thursday. One trader said: |
| After the Spanish supply last week, and with Italian supply this week, I just don't think anyone is prepared to stand in the way of these moves. Nothing has fundamentally changed, at least with respect to Italy. | After the Spanish supply last week, and with Italian supply this week, I just don't think anyone is prepared to stand in the way of these moves. Nothing has fundamentally changed, at least with respect to Italy. |
| 11.39am: Spain's borrowing costs have been rising all morning, as it moves centre stage in the eurozone debt crisis. Yields on the 10-year bond have risen to 5.938%. Here's some analysis from Jane Foley, currency strategist at Rabobank: | 11.39am: Spain's borrowing costs have been rising all morning, as it moves centre stage in the eurozone debt crisis. Yields on the 10-year bond have risen to 5.938%. Here's some analysis from Jane Foley, currency strategist at Rabobank: |
| Spanish bond yields have continued to push higher this morning despite reassurances from the Spanish PM Rajoy that the country is committed to reducing the country's budget deficit to 3% of GDP next year. The market's clearly negative response to Spanish budget was met over the weekend by commitments from the government to make another €10bn of savings mostly in health and education sectors. Right now the Spanish government appears to be losing the battle to restore budgetary credibility while each additional austerity measures serves to feed the recessionary backdrop. | Spanish bond yields have continued to push higher this morning despite reassurances from the Spanish PM Rajoy that the country is committed to reducing the country's budget deficit to 3% of GDP next year. The market's clearly negative response to Spanish budget was met over the weekend by commitments from the government to make another €10bn of savings mostly in health and education sectors. Right now the Spanish government appears to be losing the battle to restore budgetary credibility while each additional austerity measures serves to feed the recessionary backdrop. |
| She also points to the possibility of a hung parliament in Greece: | She also points to the possibility of a hung parliament in Greece: |
| Over the next few weeks Greece can be expected to push back into the headlines; once again for all the wrong reasons. Opinion polls are pointing to the likelihood of a hung parliament and to the rise of several small opposition parties all of whom oppose efforts to enact structural reform. The issue of whether or not Greece has a long term future within the Eurozone could become more relevant than ever over the spring and summer. While the risk of contagion from Greece should now be fairly well contained, it is impossible to rule further shockwaves being sent through the region. | Over the next few weeks Greece can be expected to push back into the headlines; once again for all the wrong reasons. Opinion polls are pointing to the likelihood of a hung parliament and to the rise of several small opposition parties all of whom oppose efforts to enact structural reform. The issue of whether or not Greece has a long term future within the Eurozone could become more relevant than ever over the spring and summer. While the risk of contagion from Greece should now be fairly well contained, it is impossible to rule further shockwaves being sent through the region. |
| 11.31am: @TradeDesk_Steve (head of dealing at London & Capital Asset Management) has pointed out an interesting Greek poll out today, which suggests Greece may be in for a bout of political instability. He says: | 11.31am: @TradeDesk_Steve (head of dealing at London & Capital Asset Management) has pointed out an interesting Greek poll out today, which suggests Greece may be in for a bout of political instability. He says: |
| Only 32.4% pledged support for the PASOK party led by Evangelos Venizelos or the New Democracy led by Antonis Samaras, which both form part of the current interim government. | Only 32.4% pledged support for the PASOK party led by Evangelos Venizelos or the New Democracy led by Antonis Samaras, which both form part of the current interim government. |
| However, a greater number - 34.2% - pledged support for the smaller parties that oppose austerity measures. | However, a greater number - 34.2% - pledged support for the smaller parties that oppose austerity measures. |
| A party or coalition needs 40% of the vote to form a gvt. A period of political instability is looking increasingly likely. | A party or coalition needs 40% of the vote to form a gvt. A period of political instability is looking increasingly likely. |
| 11.20am: As stock markets fall in France, Spain, the UK and Italy, the Athens stock exchange rises. Greek banks jumped as high as 11.7% this morning on hopes about plans to shore up the sector. The government said last week that details of the support package would be released by April 20. Takis Zamanis, trader at Beta Securities, said: | 11.20am: As stock markets fall in France, Spain, the UK and Italy, the Athens stock exchange rises. Greek banks jumped as high as 11.7% this morning on hopes about plans to shore up the sector. The government said last week that details of the support package would be released by April 20. Takis Zamanis, trader at Beta Securities, said: |
| The market estimates that the bank recapitalisation terms will be better than expected. | The market estimates that the bank recapitalisation terms will be better than expected. |
| 11.12am: Reuters has put out an interesting chart showing eurozone GDP growth (or otherwise) compared with the Sentix investor sentiment index, which was released earlier today. Thanks to @scottybarber, Reuters financial graphics editor, for that. | 11.12am: Reuters has put out an interesting chart showing eurozone GDP growth (or otherwise) compared with the Sentix investor sentiment index, which was released earlier today. Thanks to @scottybarber, Reuters financial graphics editor, for that. |
| 10.56am: Leaving the eurozone briefly, Sweden said industrial production suffered its sharpest fall since 2009 in February. The Nordic country has been relatively sheltered from the crisis so far but looks set to suffer as large parts of Europe - its biggest trading partner - fall back into recession. | 10.56am: Leaving the eurozone briefly, Sweden said industrial production suffered its sharpest fall since 2009 in February. The Nordic country has been relatively sheltered from the crisis so far but looks set to suffer as large parts of Europe - its biggest trading partner - fall back into recession. |
| Industrial production dropped 5.2% in February and 7.1% year-on-year. Analysts polled by Reuters expected a 0.2% gain in February, and a 1.1% increase on the year. | Industrial production dropped 5.2% in February and 7.1% year-on-year. Analysts polled by Reuters expected a 0.2% gain in February, and a 1.1% increase on the year. |
| 10.45am: News in from Athens where our correspondent Helena Smith says the government is playing down the bomb attacks of recent days. | 10.45am: News in from Athens where our correspondent Helena Smith says the government is playing down the bomb attacks of recent days. |
| There will be an official announcement about the date of Greek elections tomorrow, still widely expected to be held on May 6. Helena reports: | There will be an official announcement about the date of Greek elections tomorrow, still widely expected to be held on May 6. Helena reports: |
| An aide close to prime minister Lucas Papademos said the explosive devices were "home-made firebombs" traditionally used by young hoodies protesting against unpopular austerity measures the government has adopted in exchange for aid. "We know there are groups out there hitting such targets," said the official "but they are not human targets." The attack against the political office of former socialist prime minister Costas Simitis, who led Greece's entry into the eurozone, was of more concern, he said, because there had been no prior warning. | An aide close to prime minister Lucas Papademos said the explosive devices were "home-made firebombs" traditionally used by young hoodies protesting against unpopular austerity measures the government has adopted in exchange for aid. "We know there are groups out there hitting such targets," said the official "but they are not human targets." The attack against the political office of former socialist prime minister Costas Simitis, who led Greece's entry into the eurozone, was of more concern, he said, because there had been no prior warning. |
| Another well-briefed source said he did not expect trouble during the elections. He confirmed that an official announcement would be made late Wednesday as to when Greece would be going to the polls. "The elections are the opportunity for people to make their voices heard, to let off steam, and 99.9% they will held on May 6th." | Another well-briefed source said he did not expect trouble during the elections. He confirmed that an official announcement would be made late Wednesday as to when Greece would be going to the polls. "The elections are the opportunity for people to make their voices heard, to let off steam, and 99.9% they will held on May 6th." |
| He said there may be problems after the election if no single party wins outright and the two main parties [the centre right New Democracy and centre left Pasok] are unable to form a government. In that case, he suggested current technocract prime minister Lucas Papademos, a former vice president of the European Central Bank, might be forced to come in and "resolve what politicians are unable to do". | He said there may be problems after the election if no single party wins outright and the two main parties [the centre right New Democracy and centre left Pasok] are unable to form a government. In that case, he suggested current technocract prime minister Lucas Papademos, a former vice president of the European Central Bank, might be forced to come in and "resolve what politicians are unable to do". |
| "At the moment he very much hopes that is not the case. He wants to go back to academia." | "At the moment he very much hopes that is not the case. He wants to go back to academia." |
| 10.38am: Spanish bond yields continue to rise, reaching heights not seen since November (5.86% on 10-year bonds at the moment). Giles Tremlett, our man in Madrid, reports: | 10.38am: Spanish bond yields continue to rise, reaching heights not seen since November (5.86% on 10-year bonds at the moment). Giles Tremlett, our man in Madrid, reports: |
| As Spain's bond yields soar, the government is desperately trying to push through new measures. Yesterday's announcement of more than €10bn in health and education "savings" in Spain should help regional governments, which run these services, get closer to cutting their combined share of the deficit from 2.9% of GDP to the target of 1.5% (about €15bn altogether). | As Spain's bond yields soar, the government is desperately trying to push through new measures. Yesterday's announcement of more than €10bn in health and education "savings" in Spain should help regional governments, which run these services, get closer to cutting their combined share of the deficit from 2.9% of GDP to the target of 1.5% (about €15bn altogether). |
| There are no details (and we do not know if the €10bn is spread over one year or more), but they will presumably contain a mix of increased fees (possibly at universities) and cuts in public health provisions. As ever, though, the regional government accounts are tricky to calculate. | There are no details (and we do not know if the €10bn is spread over one year or more), but they will presumably contain a mix of increased fees (possibly at universities) and cuts in public health provisions. As ever, though, the regional government accounts are tricky to calculate. |
| The junior minister for public administration, Antonio Beteta, said yesterday that the regions had already presented plans for €10bn in savings for this year. But Beteta also said he believed Andalucia, the large southern region, is lying about the size of its deficit. Andalucia has a problem with "transparency and credibility" he told Onda Cero radio station. This week the government plans to push through parliament a law allowing it to intervene directly in regional governments if they fail to meet targets. | The junior minister for public administration, Antonio Beteta, said yesterday that the regions had already presented plans for €10bn in savings for this year. But Beteta also said he believed Andalucia, the large southern region, is lying about the size of its deficit. Andalucia has a problem with "transparency and credibility" he told Onda Cero radio station. This week the government plans to push through parliament a law allowing it to intervene directly in regional governments if they fail to meet targets. |
| 10.27am: Ferry workers in Greece started a 48-hour strike today, ahead of its celebrations for Orthodox Easter this coming Sunday (thanks for comments pointing out the Greeks celebrate Easter a week later than us). | 10.27am: Ferry workers in Greece started a 48-hour strike today, ahead of its celebrations for Orthodox Easter this coming Sunday (thanks for comments pointing out the Greeks celebrate Easter a week later than us). |
| The Panhellenic Seamen's Federation, PNO, stopped work after failing to reach a compromise with the government over benefit cuts. PNO says many of its members have not been paid for months. | The Panhellenic Seamen's Federation, PNO, stopped work after failing to reach a compromise with the government over benefit cuts. PNO says many of its members have not been paid for months. |
| Representatives of Greece's tourism industry said the potential consequences of the protest were "disastrous." | Representatives of Greece's tourism industry said the potential consequences of the protest were "disastrous." |
| 10.20am: Eurozone leaders are playing the blame game again, as noted by the FT's Brussels bureau chief: | 10.20am: Eurozone leaders are playing the blame game again, as noted by the FT's Brussels bureau chief: |
| Monti said Italy worried abt Spanish contagion. Today, Spain CentBank chief says cause of market worry is Italian "backpedaling". #BlameGame | Monti said Italy worried abt Spanish contagion. Today, Spain CentBank chief says cause of market worry is Italian "backpedaling". #BlameGame |
| — Peter Spiegel (@SpiegelPeter) April 10, 2012 | — Peter Spiegel (@SpiegelPeter) April 10, 2012 |
| 10.10am: Markets dropped across Europe this morning as traders reacted to bad jobs data out of the US on Friday. | 10.10am: Markets dropped across Europe this morning as traders reacted to bad jobs data out of the US on Friday. |
| FTSE 100: down 0.9%, or 49 points, at 5675 German DAX: down 0.8% at 6721 French CAC: down 1.1% at 3284 Spanish IBEX: down 0.9% at 7592 Italy's FTSE MIB: down 2.1% at 14892 | FTSE 100: down 0.9%, or 49 points, at 5675 German DAX: down 0.8% at 6721 French CAC: down 1.1% at 3284 Spanish IBEX: down 0.9% at 7592 Italy's FTSE MIB: down 2.1% at 14892 |
| The US data showed jobs growth in the world's largest economy slowed to 120,000 in March, well below expectations and the smallest increase since October. | The US data showed jobs growth in the world's largest economy slowed to 120,000 in March, well below expectations and the smallest increase since October. |
| 9.44am: Just to clarify, the bomb in Athens mentioned below caused some damage to the building but no injuries. AFP reports: | 9.44am: Just to clarify, the bomb in Athens mentioned below caused some damage to the building but no injuries. AFP reports: |
| A home-made firebomb exploded in the early hours of Monday in Athens in front of a building housing offices of Greece's administrative reform ministry, police said. The explosion at 1:52am (local time) in front of the ministry annex started a fire that seriously damaged the building's ground floor and a car parked nearby. | A home-made firebomb exploded in the early hours of Monday in Athens in front of a building housing offices of Greece's administrative reform ministry, police said. The explosion at 1:52am (local time) in front of the ministry annex started a fire that seriously damaged the building's ground floor and a car parked nearby. |
| The minister for administrative reform, Dimitris Reppas, recently announced a series of measures to slash the number of government workers. | The minister for administrative reform, Dimitris Reppas, recently announced a series of measures to slash the number of government workers. |
| Last week, another bomb exploded outside the office of former Greek prime minister Costas Simitis, who led the country's efforts to adopt the euro in 2002. A policeman said at the time: "It caused just small material damage, nobody was hurt or in danger." | Last week, another bomb exploded outside the office of former Greek prime minister Costas Simitis, who led the country's efforts to adopt the euro in 2002. A policeman said at the time: "It caused just small material damage, nobody was hurt or in danger." |
| 9.38am: Eurozone investor sentiment dropped this month, after three consecutive increases. Sentix research group said its index, which tracks sentiment in the region, dropped to -14.7 compared with expectations for a reading of -9. The index came in at -8.2 in March. | 9.38am: Eurozone investor sentiment dropped this month, after three consecutive increases. Sentix research group said its index, which tracks sentiment in the region, dropped to -14.7 compared with expectations for a reading of -9. The index came in at -8.2 in March. |
| 9.26am: The governor of Spain's central bank is also talking this morning. Miguel Angel Fernandez Ordonez said a strong recovery of the Spanish economy is unlikely in the short term. And, if the economy continues to deteriorate, he said more capital would be needed for the banks. | 9.26am: The governor of Spain's central bank is also talking this morning. Miguel Angel Fernandez Ordonez said a strong recovery of the Spanish economy is unlikely in the short term. And, if the economy continues to deteriorate, he said more capital would be needed for the banks. |
| The cost of insuring against a Spanish default is getting close to its record high. Spanish credit default swaps rose 16 basis points to 4.78% this morning, compared to a high of 4.87% in November last year. | The cost of insuring against a Spanish default is getting close to its record high. Spanish credit default swaps rose 16 basis points to 4.78% this morning, compared to a high of 4.87% in November last year. |
| 9.23am: The Spanish minister for the economy has also said Spain may sell off public real estate. | 9.23am: The Spanish minister for the economy has also said Spain may sell off public real estate. |
| Luis De Guindos has given a string of interviews over the past week, where he has stressed the country's commitment to reform. Spain is under pressure from Europe to rein in spending, as fears mount that the region's fourth biggest economy may need a bail-out. | Luis De Guindos has given a string of interviews over the past week, where he has stressed the country's commitment to reform. Spain is under pressure from Europe to rein in spending, as fears mount that the region's fourth biggest economy may need a bail-out. |
| De Guindos caused a ruckus yesterday when he said that Spain is considering charging the rich for the public health service, which is currently €15bn in debt. | De Guindos caused a ruckus yesterday when he said that Spain is considering charging the rich for the public health service, which is currently €15bn in debt. |
| We need to open the debate in the central government and among the regions on whether the health service should be free for someone earning €100,000. | We need to open the debate in the central government and among the regions on whether the health service should be free for someone earning €100,000. |
He added that Spain's government isn't planning to increase the country's relatively low valued-added tax this year, noting that a VAT hike in 2010 was not effective. | He added that Spain's government isn't planning to increase the country's relatively low valued-added tax this year, noting that a VAT hike in 2010 was not effective. |
| 8.47am: Here we go again... the Spanish minister for the economy, Luis de Guindos, has said he will not rule a bail-out for Spain, according to Bloomberg's economics editor. | 8.47am: Here we go again... the Spanish minister for the economy, Luis de Guindos, has said he will not rule a bail-out for Spain, according to Bloomberg's economics editor. |
| De Guindos declines to rule out bail out for Spain | De Guindos declines to rule out bail out for Spain |
| — Linda Yueh (@lindayueh) April 10, 2012 | — Linda Yueh (@lindayueh) April 10, 2012 |
| 7.53am: Spain's government yesterday announced plans for more cuts. Christian Schulz at Berenberg notes: | 7.53am: Spain's government yesterday announced plans for more cuts. Christian Schulz at Berenberg notes: |
| Together with the regions, the central government wants to make €10bn of savings per year in education and health. The cuts would come on top of the €27bn deficit reduction plan announced in March. If the government can agree with the regions on these additional cuts, they may partly fill the €15bn gap the regions need to close to fulfil their deficit target of 1.5% in 2012. | Together with the regions, the central government wants to make €10bn of savings per year in education and health. The cuts would come on top of the €27bn deficit reduction plan announced in March. If the government can agree with the regions on these additional cuts, they may partly fill the €15bn gap the regions need to close to fulfil their deficit target of 1.5% in 2012. |
| The strong fiscal tightening this year to cut the deficit from 8.5% to 5.3% may stoke fears of a deeper recession and potentially a Greek-style downward spiral in Spain. | The strong fiscal tightening this year to cut the deficit from 8.5% to 5.3% may stoke fears of a deeper recession and potentially a Greek-style downward spiral in Spain. |
| Spanish sovereign debt fell in value again this morning, pushing up the yield (the measure of the interest rate) on its 10-year bonds to 5.8% this morning. The difference between the yield on Spanish and German debt is at its greatest since November, with a spread of 4.1%. | Spanish sovereign debt fell in value again this morning, pushing up the yield (the measure of the interest rate) on its 10-year bonds to 5.8% this morning. The difference between the yield on Spanish and German debt is at its greatest since November, with a spread of 4.1%. |
| Yields on Italian and Greek sovereign debt also rose to 5.51% and 22.1% respectively. | Yields on Italian and Greek sovereign debt also rose to 5.51% and 22.1% respectively. |
| 7.50am: Germany exports grew for the second month in a row in February. Exports rose by 1.6% and imports by 3.9%, meaning the trade surplus narrowed to €13.6bn. | 7.50am: Germany exports grew for the second month in a row in February. Exports rose by 1.6% and imports by 3.9%, meaning the trade surplus narrowed to €13.6bn. |
| 7.45am: The Bank of France said this morning that the French economy remained stable in the first quarter with no growth, suggesting the second largest economy in the eurozone has avoided a recession. | 7.45am: The Bank of France said this morning that the French economy remained stable in the first quarter with no growth, suggesting the second largest economy in the eurozone has avoided a recession. |
| 7.42am: There's not a great deal of economic data out today. Here's the agenda so far. | 7.42am: There's not a great deal of economic data out today. Here's the agenda so far. |
| • Swiss unemployment rate for March: 6.45am BST • German trade balance for February: 7.00am BST • Bank of France report for March: 7.30am BST • Eurozone Sentix investor confidence for April: 9.30am BST • UK house prices for February, DCLG data: 9.30am BST | • Swiss unemployment rate for March: 6.45am BST • German trade balance for February: 7.00am BST • Bank of France report for March: 7.30am BST • Eurozone Sentix investor confidence for April: 9.30am BST • UK house prices for February, DCLG data: 9.30am BST |
| In the bond markets, Austria will be selling €1.3bn of five and 10-year bonds, the Netherlands will be selling up to €3.5bn euros of five year bonds, and France will be selling treasury bills. This afternoon the US will be selling four-week and three-year bonds. | In the bond markets, Austria will be selling €1.3bn of five and 10-year bonds, the Netherlands will be selling up to €3.5bn euros of five year bonds, and France will be selling treasury bills. This afternoon the US will be selling four-week and three-year bonds. |
| 7.30am: Good morning and welcome to our rolling coverage of the eurozone financial crisis. | 7.30am: Good morning and welcome to our rolling coverage of the eurozone financial crisis. |
| Protests continue in Athens, with Greeks using home-made firebombs to target government buildings. One exploded outside the Administrative Reform Ministry early yesterday, and another near the former Greek prime minister's office last week. | Protests continue in Athens, with Greeks using home-made firebombs to target government buildings. One exploded outside the Administrative Reform Ministry early yesterday, and another near the former Greek prime minister's office last week. |
| This morning, the Bank of Japan left rates on hold at between 0 and 0.1%; and China posted a surprise trade surplus of $5.35bn (£3.4bn) in March, although imports were much weaker than expected. | This morning, the Bank of Japan left rates on hold at between 0 and 0.1%; and China posted a surprise trade surplus of $5.35bn (£3.4bn) in March, although imports were much weaker than expected. |
| We've got figures out on Swiss unemployment in March, the German trade balance for February, and there's a survey of investor confidence in the eurozone out later. | We've got figures out on Swiss unemployment in March, the German trade balance for February, and there's a survey of investor confidence in the eurozone out later. |